Headquartered in Oklahoma City, Oklahoma, Devon Energy Corporation (DVN) is an independent energy company. With a market cap of $27.28 billion, Devon Energy engages in the exploration, development, and production of oil, natural gas, and natural gas liquids (NGLs) throughout the U.S. The company operates in Delaware, Anadarko, Williston, Eagle Ford, and Powder River Basin.
Devon Energy has significantly underperformed the broader market over the last year. The stock has declined 14.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 15.1%. In 2024, DVN stock lost 3.7%, while the SPX is up 9% on a YTD basis.
Narrowing the focus, DVN’s underperformance looks less pronounced than the iShares U.S. Oil & Gas Exploration & Production ETF (IEO). The exchange-traded fund has marginally declined over the past 52 weeks compared to DVN’s double-digit loss.
On Aug. 6, Devon Energy reported Q2 earnings. The stock gained 1.2% on the earnings release day and 2.8% in the next trading session. DVN raised the full-year 2024 production forecast for the second consecutive quarter. In addition, on Jul.15, Devon Energy closed up more than 3% amid speculation that a Trump win in the upcoming election will lead to reduced regulation in U.S. oil drilling.
However, for the current fiscal year, ending in December, analysts expect DVN’s EPS to decline by 5.3% year over year to $5.41 on a diluted basis. The company's earnings surprise history is robust. It beat the consensus estimate in each of the last four quarters.
Among the 25 analysts covering DVN stock, the consensus rating is a “Moderate Buy.” That’s based on 14 “Strong Buy” ratings, two “Moderate Buys,” and nine “Holds.”
This configuration is slightly more bullish than three months ago, with 13 suggesting a “Strong Buy.”
On Aug. 7, Benchmark Co. analyst Subash Chandra asked to maintain a ‘Hold’ on rating Devon Energy. However, Paul Cheng from Scotiabank maintained a “Buy” rating on DVN with a price target of $60.
The mean price target of $57.12 represents a 32.3% premium to DVN’s current price levels. The Street-high price target of $65 suggests an upside potential of 50.6%.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
